(Recasts with Obama call to Merkel, adds senior administration official, Hatch)
By Steve Holland and Roberta Rampton
WASHINGTON, March 4 (Reuters) - President Barack Obama spoke to German Chancellor Angela Merkel on Tuesday about a potential resolution to the crisis ignited by Russian intervention in Ukraine's Crimea region, a senior administration official said.
Under the proposal, Russia would pull back its forces in Crimea to their bases in the region, limit the Russian troop numbers to a Ukraine-mandated ceiling of 11,000, and allow in international monitors to ensure the human rights of ethnic Russians are being protected, the official said.
The so-called off-ramp out of the crisis would allow for direct discussions between the Russians and the new Ukraine government with the potential for some international mediation. Ukraine elections in May would proceed.
Obama made clear to Merkel he would not attend a G8 summit scheduled for June in Sochi, Russia, if the status quo remains in Ukraine, the official added. Preparatory meetings about the summit have already been suspended.
In comments at a fundraiser on Tuesday night, Obama said: "We may be able to de-escalate over the next several days and weeks. ... It's a serious situation and we are spending a lot of time on it."
A White House statement about the Obama-Merkel phone call said the two leaders expressed grave concern over Russia's "clear violation of Ukrainian sovereignty and territorial integrity."
They "agreed on the importance of de-escalating the situation, including through the deployment of international observers and human rights monitors, and of initiating direct talks between Russia and Ukraine," the White House said.
Russian President Vladimir Putin has denied that Russian armed forces were directly engaged in the bloodless seizure of Crimea, but said he had the right to send in military forces to protect Russian nationals who he says feel threatened by the new Ukrainian government after the ouster of pro-Moscow President Viktor Yanukovich.
U.S. officials insist there is no evidence to support the Russian allegation that ethnic Russians in Ukraine are at risk.
"President Putin seems to have a different set of lawyers making a different set of interpretations," Obama told reporters on Tuesday. "But I don't think that's fooling anybody."
The senior Obama administration official, who briefed reporters on condition of anonymity, said Merkel had been in touch with Putin about the potential solution, and that Obama had talked about it with the Russian leader in their 90-minute phone call on Saturday.
'NOT A SIGN OF STRENGTH'
Obama, who has drawn fire from Republicans for his handling of Ukraine, rejected suggestions the Russian move was a clear strategic step.
"I actually think that this has not been a sign of strength but rather a reflection that countries near Russia have deep concerns and suspicions about this kind of meddling and if anything, will push some countries further away from Russia," he said in remarks to reporters on Tuesday.
Obama said he held a meeting of the National Security Council on Tuesday morning, his second such session in two days about Ukraine.
U.S. officials are still considering an array of economic weapons to penalize Russia, starting with targeting the assets of Russian officials directly involved in the intervention in Crimea or more broadly to target a wider range of Russian officials, officials have said.
Senator Orrin Hatch, the senior Republican on the U.S. Senate Finance Committee, urged the Obama administration in a letter on Tuesday to use all available tools to ensure Russian compliance with international law, and offered to work with the administration to give it more such tools if needed.
Putin's remarks on Tuesday in which he said Russia would use military force in Ukraine as a last resort were seen in the Obama administration as a sign he is keeping his options open in Ukraine, the official said.
U.S. officials envision three potential scenarios ranging from the nightmarish to the best case. The worst would be a Russian move into eastern Ukraine, which the official said would be a dangerous escalation.
The other would be a decision by Russia to park itself in Crimea, and the third would be a de-escalation of the crisis and acceptance of an amicable resolution.
Obama said a U.S. aid package was aimed in part at making sure Ukraine had elections and that legitimate elections should show the country is able to govern itself. He urged Congress to back the aid package.
(Reporting by Steve Holland and Roberta Rampton; Additional reporting by Anna Yukhananov; Editing by Bill Trott, Eric Beech and Peter Cooney)